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Capital Markets Day Stockholm, 28 November 2007. 2 28 November 2007 Agenda CMD 28 November 2007 09.00-09.15Welcome!Fredrik Cappelen, CEO 09.15-10.15The.

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Presentation on theme: "Capital Markets Day Stockholm, 28 November 2007. 2 28 November 2007 Agenda CMD 28 November 2007 09.00-09.15Welcome!Fredrik Cappelen, CEO 09.15-10.15The."— Presentation transcript:

1 Capital Markets Day Stockholm, 28 November 2007

2 2 28 November 2007 Agenda CMD 28 November Welcome!Fredrik Cappelen, CEO The European kitchen market Nobia January-September 2007 Fredrik Cappelen, CEO Cost structure and risk managementJan Johansson, CFO Break A more coordinated kitchen offer…Fredrik Cappelen, CEO … with a more coordinated supplyBo Johansson, EVP Supply Chain Lunch Store expansion to reach full potential with better market coverage - Magnet from 200 to 300 stores - Hygena expands in France and enters Spain Preben Bager, EVP Operations UK Daniel Souissi, BU Manager, Hygena Break Nobia in Germany - Increased focus on retail - Spotlight on Culinoma - Poggenpohl ready to expand Fredrik Cappelen, CEO Elmar Duffner, BU Manager, Poggenpohl Q & A session and wrap-up Cocktail hour

3 3 28 November 2007 Agenda CMD 28 November Welcome!Fredrik Cappelen, CEO The European kitchen market Nobia January-September 2007 Fredrik Cappelen, CEO Cost structure and risk managementJan Johansson, CFO Break A more coordinated kitchen offer…Fredrik Cappelen, CEO … with a more coordinated supplyBo Johansson, EVP Supply Chain Lunch Store expansion to reach full potential with better market coverage - Magnet from 200 to 300 stores - Hygena expands in France and enters Spain Preben Bager, EVP Operations UK Daniel Souissi, BU Manager, Hygena Break Nobia in Germany - Increased focus on retail - Spotlight on Culinoma - Poggenpohl ready to expand Fredrik Cappelen, CEO Elmar Duffner, BU Manager, Poggenpohl Q & A session and wrap-up Cocktail hour

4 4 28 November 2007 Five-fold increase in Nobias net sales in 10 years Övrig försäljning / Net sales, SEK m Organic growth Acquired growth Bath Other sales

5 5 28 November 2007 Operating profit (EBIT) from negative to plus SEK 1.3 bn SEK m 1,

6 6 28 November 2007 Nobia is the leading kitchen company in Europe Net sales EUR bnBusiness modelSegmentCountriesOwnership Nobia1.8IntegratedLow to high Nordics, UK, Germany, France, Austria, Switzerland, Netherlands Public Mandemakers 1.0 (Kitchens 0.7) RetailLow to highNetherlands + Culinoma 50%Private Galiform1.0IntegratedLow to middleUKPublic MFI0.8RetailLowUK Private equity Alno0.6ProductionLow to high Germany and exports to bordering countries Public Nobilia0.6ProductionLow to middle Germany and exports to bordering countries Private SALM (Schmidt, Cuisinella) 0.25IntegratedLow to highFrance, GermanyPrivate Fournier (Mobalpa) 0.25IntegratedLow to highFrancePrivate Ballingslöv (Kvik) 0.25IntegratedLow to highNordics and UKPublic IKEA not included due to lack of official statistics. We estimate their retail sales to be approx. EUR 2 billion.

7 7 28 November 2007 Mature market with steady growth Annual volume growth in the European kitchen market Source: CSIL

8 8 28 November 2007 Driving forces in the market Economic factors Consumer confidence New-build and renovation Interest rates Needs and desires Kitchens dont break – you want a new one

9 9 28 November 2007 Housing completions – UK region source: Prognoscentret

10 10 28 November 2007 Housing completions – Nordic region source: Prognoscentret

11 11 28 November 2007 Housing completions – Continental European region source: Prognoscentret

12 12 28 November 2007 Housing completions per capita source: Prognoscentret

13 13 28 November 2007 Driving forces in the market Economic factors Consumer confidence New-build and renovation Interest rates Needs and desires Kitchens dont break – you want a new one

14 14 28 November 2007 Trends in the European kitchen market Strong interest in interior decorating Kitchens largely a consumer product Fashion and design influence choice of materials and rate of replacement

15 15 28 November 2007 Kitchen design increasingly international

16 16 28 November 2007 Consumer trends Larger, more individualised kitchens with designed white goods and accessories Larger portion of disposable income spent on the kitchen, resulting in rising average order values Consumers more demanding – store location, store environment – want a shopping experience!

17 17 28 November 2007 Consumer trends

18 18 28 November 2007 Growth in demand for complete kitchens expected to continue Cabinets & fronts Worktops White goods AccessoriesInstallation and services Customer offer package

19 19 28 November 2007 Agenda CMD 28 November Welcome!Fredrik Cappelen, CEO The European kitchen market Nobia January-September 2007 Fredrik Cappelen, CEO Cost structure and risk managementJan Johansson, CFO Break A more coordinated kitchen offer…Fredrik Cappelen, CEO … with a more coordinated supplyBo Johansson, EVP Supply Chain Lunch Store expansion to reach full potential with better market coverage - Magnet from 200 to 300 stores - Hygena expands in France and enters Spain Preben Bager, EVP Operations UK Daniel Souissi, BU Manager, Hygena Break Nobia in Germany - Increased focus on retail - Spotlight on Culinoma - Poggenpohl ready to expand Fredrik Cappelen, CEO Elmar Duffner, BU Manager, Poggenpohl Q & A session and wrap-up Cocktail hour

20 20 28 November 2007 Market situation November 2007 Nordic region –The favourable market trend continues, although with a slight weakening in the new-build segment (excluding Sweden) UK region –Market remains stable Continental European region –Mixed picture with a decline in Germany and Netherlands

21 21 28 November 2007 Net sales Jan-SepOperating profit Jan-SepOperating margin Jan-Sep SEK m 2007Change2007Change UK4,5419%38727%8.5%7.3% Nordic4,2897%528-7%12.3%14.1% Continental Europe 3,5804%188-10%5.3%6.1% Other Group adjustments Group12,3247%1,004*2%8.1%8.5% Performance by region January-September * Hygena joined the Group Mid February 2006

22 22 28 November 2007 Earnings per share SEK Nobias goal for profit growth: Earnings per share shall increase over a business cycle by an average of 12 per cent annually. Average increase is 15% + 34% % * *) Earnings per share were SEK 4.72 in 2006 for comparable units.

23 23 28 November 2007 Financial position SEK m 2007 Jan-Sep 2006 Jan-Sep Investments Operating cash flow SEK m Sep Sep Net debt2,2612,635 Net debt/equity, %5973

24 24 28 November 2007 Agenda CMD 28 November Welcome!Fredrik Cappelen, CEO The European kitchen market Nobia January-September 2007 Fredrik Cappelen, CEO Cost structure and risk managementJan Johansson, CFO Break A more coordinated kitchen offer…Fredrik Cappelen, CEO … with a more coordinated supplyBo Johansson, EVP Supply Chain Lunch Store expansion to reach full potential with better market coverage - Magnet from 200 to 300 stores - Hygena expands in France and enters Spain Preben Bager, EVP Operations UK Daniel Souissi, BU Manager, Hygena Break Nobia in Germany - Increased focus on retail - Spotlight on Culinoma - Poggenpohl ready to expand Fredrik Cappelen, CEO Elmar Duffner, BU Manager, Poggenpohl Q & A session and wrap-up Cocktail hour

25 25 28 November 2007 Presentation topics Market indicators Risk management Nobias exposure to the new-build segment Structure of product costs Financial position

26 26 28 November 2007 Consumer confidence in the UK source: Prognoscentret

27 27 28 November 2007 Housing transactions in the UK (rolling 4q) source: Prognoscentret, BoE

28 28 28 November 2007 UK housing transactions vs. Nobias organic growth

29 29 28 November 2007 Consumer confidence in the Nordics source: Prognoscentret

30 30 28 November 2007 Housing transactions in the Nordics (rolling 4q) source: Prognoscentret

31 31 28 November 2007 Consumer confidence in Continental Europe source: Prognoscentret

32 32 28 November 2007 Nobias risk management focus Operating risks –Raw material prices –Market development –Competitor activity –Currency effects Financial risks –Commercial exposure –Financial exposure –Pensions –Funding risks

33 33 28 November 2007 Operational leverage – cost allocation Material Freight Bonuses Salaries/wages Marketing Maintenance Depreciation Rent & rates Insurance Examples 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% NordicsCont. EurUK VariableSemi-variableFixed

34 34 28 November 2007 Nobias sales to the new-build segment differ by region 0% 20% 40% 60% 80% 100% NordicCont. Eur.UK New buildRenovation

35 35 28 November 2007 Structure of purchasing costs divided into thirds Components for processing Assembly components Traded products

36 36 28 November 2007 Directly operated stores as of 30 September No. storesNo. of employeesApprox. size (m 2 ) Consumer sales Hygena: Retail park112~ % Hygena: Mall store28~ % Magnet: Retail30~ % Poggenpohl27~4250~95% Magnet: Mixed134 ~51,200~50% Magnet: Trade31~61,1000% Norema20~5360~35% Sales through directly operated stores amount to roughly 40% of Nobias sales

37 37 28 November 2007 Strong financial position SEK m Jan-Sep Jan-Dec Operating cash flow In % of sales SEK m Sep 2007Dec 2006 Net debt 2,261 2,460 Equity 3,8333,734 Net debt/equity 59%66% Available funds 4,7014,653

38 38 28 November 2007 Solid platform for further growth Decentralised organisation in close proximity to local markets Strong presence in the main channels in most markets Healthy spread of geographical risk Favourable visibility in the new-build segment Continuous coordination of supply to support competitiveness

39 39 28 November 2007 Agenda CMD 28 November Welcome!Fredrik Cappelen, CEO The European kitchen market Nobia January-September 2007 Fredrik Cappelen, CEO Cost structure and risk managementJan Johansson, CFO Break A more coordinated kitchen offer…Fredrik Cappelen, CEO … with a more coordinated supplyBo Johansson, EVP Supply Chain Lunch Store expansion to reach full potential with better market coverage - Magnet from 200 to 300 stores - Hygena expands in France and enters Spain Preben Bager, EVP Operations UK Daniel Souissi, BU Manager, Hygena Break Nobia in Germany - Increased focus on retail - Spotlight on Culinoma - Poggenpohl ready to expand Fredrik Cappelen, CEO Elmar Duffner, BU Manager, Poggenpohl Q & A session and wrap-up Cocktail hour

40 40 28 November 2007 Nobias business direction Continuation of set strategy A. Organic growth through increased market focus and new and better stores. Nobia will achieve organic growth within existing operations and by opening new stores with focused and scalable concepts. B.Internal efficiency will increase through coordinated supply and simplified structures. C.Nobia will also continue to grow through acquisitions.

41 41 28 November 2007 A. Structuring customer offers to improve EBIT margins Main principles: Continue to develop selected competitive concepts and strong market positions in Europe Prioritise customer-friendly and attractive concepts with strong influence on the offer –Wholly owned stores and strong franchise concepts –Scalable Direct concepts and brands towards distinct price and style segments, as well as sales channels This approach aims to support the reduction of assortment, improve market communication and reduce costs.

42 42 28 November 2007 Nobias main principles for kitchen offers Under development HIGH MIDDLE ECONOMY Local/regional complementary brands or channels Scalable complete kitchen offers LOCAL BRAND

43 43 28 November 2007 Style Price Young Contem- porary BasicClassicTraditional High Medium Economy The range matrix – a tool to optimise the brand portfolio Style Price Under development

44 44 28 November 2007 Nobias business direction Continuation of set strategy A. Organic growth through increased market focus and new and better stores. Nobia will achieve organic growth within existing operations and by opening new stores with focused and scalable concepts. B.Internal efficiency will increase through coordinated supply and simplified structures. C.Nobia will also continue to grow through acquisitions.

45 45 28 November 2007 B. Reduced product costs a key issue Continue to coordinate supply Target supply and production towards more co-ordinated assortments Rationalise production The supply chain aims to become less dependent of channels and brands.

46 46 28 November 2007 C. Acquired growth is part of our strategy This applies to both Nobia and Culinoma.

47 47 28 November 2007 Agenda CMD 28 November Welcome!Fredrik Cappelen, CEO The European kitchen market Nobia January-September 2007 Fredrik Cappelen, CEO Cost structure and risk managementJan Johansson, CFO Break A more coordinated kitchen offer…Fredrik Cappelen, CEO … with a more coordinated supplyBo Johansson, EVP Supply Chain Lunch Store expansion to reach full potential with better market coverage - Magnet from 200 to 300 stores - Hygena expands in France and enters Spain Preben Bager, EVP Operations UK Daniel Souissi, BU Manager, Hygena Break Nobia in Germany - Increased focus on retail - Spotlight on Culinoma - Poggenpohl ready to expand Fredrik Cappelen, CEO Elmar Duffner, BU Manager, Poggenpohl Q & A session and wrap-up Cocktail hour

48 48 28 November 2007 Presentation topics A.From purchasing to efficient supply chain – measures taken B.Strategic direction

49 49 28 November 2007 Past acquisitions have led to a large assortment Example: fronts (cabinet doors) Nobia sources and manufactures more than 13 million fronts per year Nobia has a total of 1,049 types Top 10 in volume represent 15% of the total volume

50 50 28 November 2007 Product cost is 65* per cent of Nobias total sales The single largest cost within Nobia Products becoming more pan-European due to harmonisation of consumer preferences * Direct materials and production costs

51 51 28 November 2007 From purchasing to supply chain management since 2005 Few products / suppliers on central contracts. Local purchasing with local suppliers. Decentralised product development and assortment management No central product database and information system Group wide SQP with defined process for supplier selection, product evaluation and supplier performance. Group-wide product life cycle (PLC) process. Coordinated product development. Core- range products. Centrally coordinated assortment. Central strategic sourcing on defined product categories. First-tier suppliers. Central product database including classifications and technical information FromTo Local Supplier Quality Process (SQP) Purchasing focused on price Central resourses managing a focused cost- improvement process. Analysing all cost drivers (TCO) including design, logistics, etc.

52 52 28 November 2007 ~ 10, Creation of core range reduced the number of active articles, brands and suppliers PreviouslyToday Sourcing and product management has become less complicated Example: White goods

53 53 28 November 2007 Presentation topics A.From purchasing to efficient supply chain – measures taken B.Strategic direction

54 54 28 November 2007 Towards a brand- and channel-independent supply chain Stores Projects DIY chains CustomerManufacturing & sourcing Various channels Assortment High-end Middle Economy Supply Internal & External Distribution and logistics Service contracts Supply

55 55 28 November 2007 Examples of existing co-ordinated supply chain EWE/FM in Austria Two separate supply organisations merged into one Assortment and channel segmentation between brands (EWE, FM) Same carcass standard for all brands Supply chain optimised to supply several brands and channels within a defined geographical area (EWE, FM, project market, Nobia internal components) Novart in Finland One supply organisation Assortment and channel segmentation between brands (Parma, A la Carte, Petra) Same carcass standard for all brands Supply chain optimised to supply several brands and channels within a defined geographical area (project market)

56 56 28 November 2007 Agenda CMD 28 November Welcome!Fredrik Cappelen, CEO The European kitchen market Nobia January-September 2007 Fredrik Cappelen, CEO Cost structure and risk managementJan Johansson, CFO Break A more coordinated kitchen offer…Fredrik Cappelen, CEO … with a more coordinated supplyBo Johansson, EVP Supply Chain Lunch Store expansion to reach full potential with better market coverage - Magnet from 200 to 300 stores - Hygena expands in France and enters Spain Preben Bager, EVP Operations UK Daniel Souissi, BU Manager, Hygena Break Nobia in Germany - Shifting positions: from manufacturer to retailer - Spotlight on Culinoma - Poggenpohl ready to expand Fredrik Cappelen, CEO Elmar Duffner, BU Manager, Poggenpohl Q & A session and wrap-up Cocktail hour

57 57 28 November 2007 Organic growth through scalable, proven concepts As reported in Q2: Better market coverage by expanding Magnet network in UK and Hygena network in France. Enter Spain with Hygena concept in 2008.

58 58 28 November 2007 Agenda CMD 28 November Welcome!Fredrik Cappelen, CEO The European kitchen market Nobia January-September 2007 Fredrik Cappelen, CEO Cost structure and risk managementJan Johansson, CFO Break A more coordinated kitchen offer…Fredrik Cappelen, CEO … with a more coordinated supplyBo Johansson, EVP Supply Chain Lunch Store expansion to reach full potential with better market coverage - Magnet from 200 to 300 stores - Hygena expands in France and enters Spain Preben Bager, EVP Operations UK Daniel Souissi, BU Manager, Hygena Break Nobia in Germany - Increased focus on retail - Spotlight on Culinoma - Poggenpohl ready to expand Fredrik Cappelen, CEO Elmar Duffner, BU Manager, Poggenpohl Q & A session and wrap-up Cocktail hour

59 59 28 November 2007 Nobias sales to the new-build segment differ by region 0% 20% 40% 60% 80% 100% NordicCont. Eur.UK New buildRenovation

60 60 28 November 2007 Two brands serving two different customer groups Small, local buildersUpper/middle market consumers

61 61 28 November 2007 Two brands with two different service offerings Price-led, in stockFull service offering: design, home delivery & installation

62 62 28 November 2007 Two brands and two strategies for growth Investment in people to grow the customer base Refurbish the outdated showroom network

63 63 28 November 2007 Our objective for retail The best showroom in town Appropriate investment for the location & catchment area Crawley

64 64 28 November 2007 Our objective for retail The best showroom in town Appropriate investment for the location & catchment area Doncaster Before

65 65 28 November 2007 Doncaster After

66 66 28 November 2007 Eastleigh Before

67 67 28 November 2007 Eastleigh After

68 68 28 November 2007 Loughborough Before

69 69 28 November 2007 Loughborough After

70 70 28 November 2007 Kidderminster Before

71 71 28 November 2007 Kidderminster After

72 72 28 November 2007 Reducing the cost of refurbishment Average capex spend £000s

73 73 28 November 2007 Store refurbishment programme follow-up Current status94 branches refurbished –By Christmas20 –Plan for Total145

74 74 28 November 2007 Our objective for Trade Investment in new colleagues to grow and service our trade account base (Not just that though) –The right products available from stock –Pricing to suit the local market –Competitive advantage –Central and local marketing

75 75 28 November 2007 From generalists to specialists Sales generation Stock management Lead generaton/local marketing Kitchen Design New Account Prospecting Managing the business Salesperson aSalesperson b SalespersonWarehouse PersonInternal RepKitchen DesignerExternal RepManager

76 76 28 November 2007 All focused on servicing and developing the account base

77 77 28 November month active accounts

78 78 28 November 2007 Minimising the profit dip Dip in profit caused by immediate increase in overheads –more colleagues –higher branch operating costs (marketing, reps costs etc) Initial unfavourable product mix Sales growth slowest in the first few months

79 79 28 November 2007 Minimising the profit dip Months following conversion Original Trial New Profit impact

80 80 28 November 2007 Current store network

81 81 28 November 2007 New stores Currently 195 Magnet branches 30 Retail solus 31 Trade solus 134 Mixed sites (Retail & Trade under one roof) So far in unprofitable store closed 8 branches opened 3 further branches to open before Christmas Gaps in key markets Maximise usage of national media advertising Enable more small local builders to access Magnet Trade

82 82 28 November 2007 Some gaps in key markets

83 83 28 November 2007 Our objective: 300 branches

84 84 28 November different types of branches in the future Each split by target market A. Trade SolusC. Retail SolusB. Mixed siteD. Trade+

85 85 28 November 2007 A. Trade Solus Industrial estate/trade park Approx. 10,000 sq ft £60k-£80k pa rent Trade counter, very basic showroom May already have a successful retail business but no trade presence Further opportunity within a large city where another retail-facing branch may not be desirable

86 86 28 November 2007 B. Mixed site Solus location Approx. 15,000 sq ft 2,000 sq ft showroom minimum 10,000 sq ft warehouse £100k-£150k pa rent but appropriate to town No current Magnet branch in town or relocation of existing site Limited availability due to planning consents

87 87 28 November 2007 C. Retail Solus Retail park/High Street 2,000-5,000 sq ft £60k-£120k pa rent Size appropriate to opportunity May already have a successful trade solus/trade-based business but no/minimal retail presence

88 88 28 November 2007 D. Trade + Industrial estate/trade park Trade counter plus trade showroom showcasing trade kitchen offer to the builders customer. About 6 sets on display, mainly trade ranges Approx. 12,000 sq ft, 60,000-80,000 pa rent Trade-only with consumer sales via the builder No Magnet retail or trade presence in town Large population but not economically strong enough to support full retail presence Morley/Luton shot

89 89 28 November 2007 Sales growth from new sites Months following conversion Retail Trade

90 90 28 November 2007 Magnet retail development

91 91 28 November 2007 Agenda CMD 28 November Welcome!Fredrik Cappelen, CEO The European kitchen market Nobia January-September 2007 Fredrik Cappelen, CEO Cost structure and risk managementJan Johansson, CFO Break A more coordinated kitchen offer…Fredrik Cappelen, CEO … with a more coordinated supplyBo Johansson, EVP Supply Chain Lunch Store expansion to reach full potential with better market coverage - Magnet from 200 to 300 stores - Hygena expands in France and enters Spain Preben Bager, EVP Operations UK Daniel Souissi, BU Manager, Hygena Break Nobia in Germany - Increased focus on retail - Spotlight on Culinoma - Poggenpohl ready to expand Fredrik Cappelen, CEO Elmar Duffner, BU Manager, Poggenpohl Q & A session and wrap-up Cocktail hour

92 Hygena Kitchen Retail Business les Cuisines, l´ Electroménager et les Salles de Bains

93 93 Hygena in brief DSO

94 Kitchen price index Service offer index Generalists + – Specialists Source: Market Audit - June 2005 and Company information dedicated servicesaffordable prices += A competitive environment in a fragmented market Unique positioning DSO

95 95 Vital stats Hygena was formed 27 years ago by MFI UK In the beginning it was a pure cash-and-carry furniture business Now it is a business with 142 stores, EUR 220 m selling more than 60,000 kitchens a year Number 1 in volume in France, number 3 in sales

96 96 Snaidero SALM Pricin g AffordableExpensive 100% Fitted DIY Fitting Hygenas unique hybrid business model increases freedom of maneuver and limits vulnerability to the competition. A strong competitive position DSO

97 97 Hygena covers only 56% of the French population and is absent from Paris intra-muros Current geographic coverage of Hygena 142 stores – 32 stores in shopping malls – 110 stores in retail parks 142 stores – 18 in Ile de France – 124 outside Ile de France

98 98 What happened since we joined Nobia February 2006? We adjusted our sales organisation We started to move from external sourcing to internal (70% of products transferred to date) We started to revisit our overall supply chain We started to revisit our product range We reduced the number of depots We launched Spain entry

99 99 Hygena logistics organisation 26 depots throughout France

100 100 Business vision and customer service objectives for the next 3 years Maintain and strengthen our current marketing mix in order to grow our market share in France and enter new export markets by: Extending our store network in France and Spain Simplifying and securing our order fulfillment processes in order to : – Reach 98% customer service ratio Revisiting our procurement processes in order to: – Deliver a range of present products on stock – Deliver a range of present products within 3 weeks lead time – Deliver a range of present products within 6 weeks lead time

101 101 Extend our store network in France by new stores in 3 years 35 identified locations outside Paris region 15 identified locations in greater Paris region 10 identified locations in downtown Paris DSO

102 102 No. of stores Mobalpa13 Arthur Bonnet6 Schmidt4 Chabert Duval5 Independent kitchen stores70 Our first high-street store in Paris is a success Paris: an important market where Hygena has just mad an imprint in 2007! 2 million inhabitants (20% of the population of Ile de France) Total Paris region population : 10 million inhabitants A potential market of EUR 120 million only for downtown Paris DSO Chabert Duval Mondial Kit Arthur Bonnet Lapeyre Schmidt Mobalpa Vogica

103 103 Entering Spain 2008 Traditional route to market is changing from small joineries to specialised retail. Retail industry is booming in Spain. French retail community is rather strong in Spain. This gives us good opportunities for opening stores and hiring. Our marketing mix seems to be very competitive compared with local suppliers.

104 November 2007 Agenda CMD 28 November Welcome!Fredrik Cappelen, CEO The European kitchen market Nobia January-September 2007 Fredrik Cappelen, CEO Cost structure and risk managementJan Johansson, CFO Break A more coordinated kitchen offer…Fredrik Cappelen, CEO … with a more coordinated supplyBo Johansson, EVP Supply Chain Lunch Store expansion to reach full potential with better market coverage - Magnet from 200 to 300 stores - Hygena expands in France and enters Spain Preben Bager, EVP Operations UK Daniel Souissi, BU Manager, Hygena Break Nobia in Germany - Increased focus on retail - Spotlight on Culinoma - Poggenpohl ready to expand Fredrik Cappelen, CEO Elmar Duffner, BU Manager, Poggenpohl Q & A session and wrap-up Cocktail hour

105 November 2007 From manufacturing to retail focus Acquisitons Poggenpohl, Pronorm, Goldreif, Optifit 50/50 joint-venture Culinoma founded and acquires Plana, Marquardt, Asmo Closure Star Beka Modified strategy Closure Goldreif

106 November 2007 Specific for the German market Manufacturers Customers Furniture stores Take away/ DIY Construction companies Mail order Large kitchen specialist Small Kitchen specialists Buying associations Buying associations play a dominant role in distribution with about 70-80% of total kitchen sales. Size of market 7%Size of market 32%Size of market 49%Size of market 9% From CMD 2006

107 November 2007 CE regional objectives A.Improve and develop present business and strengthen the overall organisation and structure B.Increase total sales turnover and develop margins by acquiring kitchen retailers and kitchen manufacturers with controlled distribution Strategic decision Oct 2006

108 November 2007 Gradually changing our German business units Optifit doing many things for many customers Pronorm both producing and supporting marketing activities for many Poggenpohl producing and selling worldwide through both project sales and independent dealers Specialised production of kitchens for the economy segment, primarily internal Nobia customers Focus on producing kitchens for the middle segment, primarily for few, large and strategic customers Poggenpohl to intensify sales in directly operated stores with a clear concept FromTo When targeting increased sales and improved margins, top-notch supply is more vital than own manufacturing.

109 November 2007 Culinoma: an essential part of the retail strategy Fragmented retail Consolidated business by 1.Co-ordinating the assortment/concept 2.Co-ordinating back-office 3.Common supply chain 4.Improve the store network Scalable business That can grow organically and attract more dealers to join. Further growth through acqusitions…

110 November 2007 Culinoma is a strategic 50/50 joint venture for kitchen retail Joint forces improve potential synergies in supply, marketing, logistics and distribution in Germany Jointly managed, leverage of both parties know-how High level of retail know-how in DMG 50/50

111 November 2007 DeMandemakersGroep in brief The leading Dutch kitchen, furniture and bathroom retailer Headquartered in Waalwijk, Netherlands Privately owned by Ben Mandemakers, president and CEO

112 November % market share in the Dutch kitchen retail market Strong and well-known retail brands in the Dutch kitchen market Approx. 4,500 employees Approx. 200 kitchen and bathroom stores The total sales of Ben Mandemakers companies is approx. EUR 1 billion 40%

113 November 2007 Culinoma, founded in February 2007, currently operates 77 kitchen stores from north to south with retail annual sales of approximately EUR 180 million. Culinoma leads the kitchen retail sector

114 November 2007 A closer view of Culinoma Plana Marquardt Asmo

115 November 2007 Culinomas channel- and brand-independent supply chain Stores E-commerce CustomerInternal production Various channels Assortment Plana Asmo Marquardt Buy Pronorm and other manufacturers Distribution and logistics center Transport Service contracts Buy

116 November 2007 Nobias customer offering in Germany In principle Poggenpohl Plana B to B Local/regional complementary kitchen offers Scalable, complete kitchen offers Asmo Marquardt B to B

117 November 2007 Agenda CMD 28 November Welcome!Fredrik Cappelen, CEO The European kitchen market Nobia January-September 2007 Fredrik Cappelen, CEO Cost structure and risk managementJan Johansson, CFO Break A more coordinated kitchen offer…Fredrik Cappelen, CEO … with a more coordinated supplyBo Johansson, EVP Supply Chain Lunch Store expansion to reach full potential with better market coverage - Magnet from 200 to 300 stores - Hygena expands in France and enters Spain Preben Bager, EVP Operations UK Daniel Souissi, BU Manager, Hygena Break Nobia in Germany - Increased focus on retail - Spotlight on Culinoma - Poggenpohl ready to expand Fredrik Cappelen, CEO Elmar Duffner, BU Manager, Poggenpohl Q & A session and wrap-up Cocktail hour

118 November 2007 Presentation topics 1.Poggenpohl: Well-positioned in the premium segmentPAST 2.Recent development: Co-branding with Porsche DesignPRESENT 3.Outlook: Expansion of own store networkFUTURE

119 November years of preparation We have redesigned our product portfolio Two distinctive design languages: modern purism and modern classic Three innovative modern design concepts that are the recipients of numerous awards Solid basis for growth: differentiating, modern and appealing for a large number of premium customers We have introduced a consistent design concept for all our studios worldwide (+Studioconcept) We have significantly reduced the total number of stores and thereby achieved a consistent high-class PoS-appearance throughout the world We have continuously increased the number of own stores and now run 27 own stores Continuous improvements in both sales and earnings performance Now Poggenpohl is ready for a more substantial take-off

120 November 2007 Poggenpohl is well positioned for growth Premium Mass Custom cabinets Price level Design language Custom cabinets Niche brands

121 November 2007 Poggenpohl offers three award-winning modern design concepts +SEGMENTO+INTEGRATION PLUSMODO

122 November 2007 Increasingly successful in the project business Poggenpohl will supply 1,600 luxury kitchens for the City of Arabia in Dubai

123 November % Source: Verband der Deutschen Küchenmöbelindustrie, Statistisches Bundesamt, HDM/ VDM, own calculations Net sales performance (Indexed, 2003 = 100) Earnings performance (Indexed, 2003 = 100) German kitchen manufacturers global net sales volume Poggenpohl global net sales : Earnings = 0 Poggenpohl combines growth and investments

124 November Poggenpohl: Well-positioned in the premium segment PAST 2.Recent development: Co-branding with Porsche Design PRESENT 3.Outlook: Expansion of own store networkFUTURE

125 November 2007 Poggenpohl lifts the kitchen to a new level and triggers a lot of attention. Poggenpohl goes one step further + =

126 November 2007 Unveiling in Leipzig 13 September 2007

127 November 2007 First press reactions overwhelmed us Bild-Zeitung Handelsblatt derStandard Möbel Kultur Welt am Sonntag

128 November 2007 Poggenpohl Porsche Design Kitchen P7340 Kitchen for men: The exclusive co-branding between Poggenpohl and Porsche Available Spring 2008

129 November Poggenpohl: Well-positioned in the premium segment PAST 2.Recent development: Co-branding with Porsche Design PRESENT 3.Outlook: Expansion of own store networkFUTURE

130 November 2007 Organic growth of a proven concept new wholly owned stores will be opened by 2011 Reasons for vertical integration Access to the end consumer Better control over customer interaction Possibilities to display the full product range Increased growth potential Flagship stores create lighthouse effects

131 November 2007 Why focus on expanding our own store network? Some best-practice examples:

132 November 2007 Own stores are a clear trend in premium goods Sales share Royalties Sales share Wholesale # Own Stores in 2005 (1) Including Eluxury.com (2) Status ; 65 Stores, 165 Concessions and 30 Outlets (3) Status , excl. Hacket und Old England (4) Status annual report 2006 (5) Status annual report 2006 Source(s): JP Morgan - The Luxury Goods Handbook (2000); Mintel - Luxury Goods Retailing; Retail Intelligence (2004) und (2006); Annual reports of companies; BCG analysis Louis Vuitton (1) Gucci RichemontBurberryHermès 345 Dior (3) 260 (2) Sales share Own Retail Bang & Olufsen 733 (4) BOSS 210 (5) /0103/04 00/0105/06 00/01 05/ /02 05/

133 November 2007 Often coincides with increasing margins ( Sample premium-goods manufacturers) Revenue share of own retail Operating Margin (1) LV (2) '00 LV (2) '05 Dior '00 Dior '05 Burberry '05 Hermès '00 Hermès '05 Gucci '00 Gucci '05 Burberry '00 B&O '05/'06 B&O '01/'02 BOSS '06 BOSS '00 (1) Operating Margin = Operating income/net sales (%) (2) Including Eluxury.com; # own stores und share Own Retail of Louis Vuitton, Operating Margin of LVMH Source: JP Morgan - The Luxury Goods Handbook (2000); Mintel - Luxury Goods Retailing, Retail Intelligence (2004) und (2006); Companies' annual reports; BCG analysis

134 November 2007 Higher margins through wholly owned stores Source(s): Thomson Financial Datastream; Bloomberg; Company Information, Annual Reports; BCG analysis CAGR: 8.7% EBIT (%) CAGR: 8.8% EBIT (%) CAGR: 7.3% EBIT (%.) CAGR: 23.7% EBIT (%)Annual sales (Mio. )

135 November 2007 Flagship mission: staging the brand Apple, NYC Gucci Flagship Ginza Road, Tokyo Louis Vuitton, Shanghai Nokia, NYC

136 November 2007 Flagships also inspire the independent retail partners Brand experience Visual merchandising Customer service concept Assortment breadth

137 November 2007 The Poggenpohl path to own store expansion

138 November 2007 Identified potential locations for own stores by new own stores, 45% in Europe Berlin Cologne Munich Birmingham Philadelphia Paris I & II Lyon Milan Madrid Barcelona Rotterdam Vienna Athens Toronto Boston II Washington, DC Chicago II Amsterdam Brussels Rome Glasgow Dublin Los Angeles II San Francisco Miami II Detroit Dallas Houston San Diego Seattle LasVegas Montreal Minneapolis Tampa Brisbane Tokyo I Nagoya Yokohama Kobe/Osaka New York III Moscow

139 November 2007 Consistent store design a key success factor NokiaEsprit Blue color combined with large plasma screens White logo on red surface, combined with light wooden floor Poggenpohl Light colors combined with materials of glass & steel

140 November 2007 A closer look at Poggenpohl Stuttgart & Düsseldorf

141 November 2007 The rocket has lifted – now we will start the second rocket stage

142 November 2007 Agenda CMD 28 November Welcome!Fredrik Cappelen, CEO The European kitchen market Nobia January-September 2007 Fredrik Cappelen, CEO Cost structure and risk managementJan Johansson, CFO Break A more coordinated kitchen offer…Fredrik Cappelen, CEO … with a more coordinated supplyBo Johansson, EVP Supply Chain Lunch Store expansion to reach full potential with better market coverage - Magnet from 200 to 300 stores - Hygena expands in France and enters Spain Preben Bager, EVP Operations UK Daniel Souissi, BU Manager, Hygena Break Nobia in Germany - Increased focus on retail - Spotlight on Culinoma - Poggenpohl ready to expand Fredrik Cappelen, CEO Elmar Duffner, BU Manager, Poggenpohl Q & A session and wrap-up Cocktail hour

143 November 2007 Nobias business direction Continuation of set strategy A. Organic growth through increased market focus and new and better stores. Nobia will achieve organic growth within existing operations and by opening new stores with focused and scalable concepts. B.Internal efficiency will increase through coordinated supply and simplified structures. C.Nobia will continue to grow through acquisitions.

144 November 2007 Agenda CMD 28 November Welcome!Fredrik Cappelen, CEO The European kitchen market Nobia January-September 2007 Fredrik Cappelen, CEO Cost structure and risk managementJan Johansson, CFO Break A more coordinated kitchen offer…Fredrik Cappelen, CEO … with a more coordinated supplyBo Johansson, EVP Supply Chain Lunch Store expansion to reach full potential with better market coverage - Magnet from 200 to 300 stores - Hygena expands in France and enters Spain Preben Bager, EVP Operations UK Daniel Souissi, BU Manager, Hygena Break Nobia in Germany - Increased focus on retail - Spotlight on Culinoma - Poggenpohl ready to expand Fredrik Cappelen, CEO Elmar Duffner, BU Manager, Poggenpohl Q & A session and wrap-up Cocktail hour


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